Kyoto – In effort to crack down on corporations and individuals that evade taxes overseas, representatives from 82 countries agreed to draft criteria that could be used to put non-cooperative nations and jurisdictions on an international blacklist.
The two-day meeting, which concluded in Kyoto Friday, was held by the Organization for Economic Cooperation and Development’s Committee on Fiscal Affairs. It marked the first gathering of its type by developed and developing countries to tackle tax evasion, which has become a major issue and international concern following the Panama Papers scandal.
In his summary, Chairman Masatsugu Asakawa noted that three benchmarks were discussed. These include a country’s transparency level, with extra weight given to the rating given by an international group known as the Global Forum on Transparency and Exchange of Information for Tax Purposes.
The other criteria include a firm commitment to an internationally recognized common reporting standard, and an agreement to participate in international forums devoted to administrative assistance on tax matters.
“A jurisdiction is considered non-cooperative if it fails to meet more than one out of the three benchmarks. Even if a jurisdiction meets two of the three benchmarks, it would be considered ‘non-coopeative’ if it is considered ‘non-compliant’ with the Global Forum,” Asakawa said in the chairman’s written statement.
There are 82 members that have signed up for the OECD’s project to halt tax evasion activities, which were formally referred to as “base erosion and profit shifting,” or BEPS. While members include such internationally known tax havens as Switzerland and the Isle of Man, Panama is not yet a member and dispatched an observer to the Kyoto meeting.
“It’s good that they were here, and they’re moving forward towards joining, but it’s not yet good enough,” said Pascal Saint-Amans, director of the OECD Center for Tax Policy and Administration.
OECD members and members of the G-20 are expected to offer a formal proposal on what criteria should be used to judge compliancy at the next G-20 finance ministers meeting in China later this month.
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